Wolves have agreed a £7million fee with Birmingham for central defender Roger Johnson, Press Association Sport understands.
Johnson is believed to be holding talks with Wolves officials over a move to Molineux.
If the deal goes through, it would equal the club record fee Wolves paid Burnley last summer for Burnley striker Steven Fletcher.
Wolves boss Mick McCarthy is keen to bring in a new centre-back and had a £3million bid rejected for Reading's Matt Mills before he moved to Leicester last week.
But Johnson has been on his radar since the end of last season when Blues were relegated from the Premier League.
City had initially been hoping to secure around £10million should Johnson leave St. Andrew's, but it is believed a compromise has been reached.
Lifelong Chelsea fan Johnson moved from Cardiff to St. Andrew's in a £5million deal two years ago.
He quickly adjusted to the top flight and formed an effective partnership with Scott Dann, another Championship player with Coventry.